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  #1  
Old 02-25-2012, 07:48 PM
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Two banks fighting to get my loan.

So get this. Last Monday I went in and got my 2011 GC. My bank was offering 3.5% financing. So after settling on a price, I told them what my bank gave me and asked if they could beat it. Of course they did, they said they could get me 3.39% through another bank. Being a lower rate I figured why not. So I signed.

I called my bank to tell them that I wouldn't need the loan through them and they counter offered with 2.45%. I said, WOW! I'll take it. So then I called the bank that I signed the loan through and told them I was transfering it back. Guess what, magically another lower rate came my way. 2.15%.

They were fighting it out. In the long run, the original bank won out offering me 2.15% that the other bank couldn't beat.

So today I went in and signed new paperwork for the loan. Ended up lowering my monthly payment around $20 a month.

I asked, "How come I didn't get this rate last Monday? His replay, "They probably figured since it was lower than 3.5% you would be happy and go with it when in reality I probably qualified for an even lower rate

But when one bank drops out, there isn't much more I could do.
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Old 02-25-2012, 08:29 PM
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Re: Two banks fighting to get my loan.

I got a great rate too and I had 3 banks - held out for my favorite to match. Congrats on the Jeep and saving money. When banks drop off there goes your bargaining chip.
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Old 02-26-2012, 01:51 AM
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Re: Two banks fighting to get my loan.

You definitely get an advantage when multiple lenders are bidding. I settled on a price then went to the "finance guy". I had an offer from USAA at 3.6%, they offered me 2.9%. When we got onto "negotiating" for warranties, I said absolutely no unless the payment was the same. Long story short, they found a third financier at 1.9% and dropped the price a bit and the warranty was a wash.
I'm not here to argue the value of extended warranties, just to show when banks want customers with decent credit, if you drive a hard bargain you can get a great rate.

Also, congrats on a awesome buy!! I love my jeep so far.
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Old 02-26-2012, 06:05 AM
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Re: Two banks fighting to get my loan.

Forget the banks, save up and pay cash!
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Old 02-26-2012, 08:21 AM
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Re: Two banks fighting to get my loan.

Quote:
Originally Posted by tnjeep View Post
Forget the banks, save up and pay cash!
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Old 02-26-2012, 10:30 AM
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Quote:
Originally Posted by tnjeep View Post
Forget the banks, save up and pay cash!
While nice if you can do it, you are actually costing yourself money in the long run if you can get a low enough rate on the loan and still pay cash. For instance if you can get a 2% loan and then invest the $30-40k cash that you would have spent at 5% or better then you are better off taking the loan. Of course you have to look at the fees in the loan and taxes paid on the interest, blah, blah, blah. But at some point you are actually better off taking the bank's money. Even in this economy you should be able to beat the interest paid.

I actually went through Chase and got around 2.4%. At the time they had a banner advertising 2.9% but when I actually applied I got the lower rate due in part to auto withdrawal and having my accounts there. My wife is a VP & officer at another bank and she couldn't even come close! I think they were at 4.25%! Yeah, it's a hot button topic around here - she was NOT happy with me!
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Old 02-26-2012, 10:37 AM
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Re: Two banks fighting to get my loan.

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Originally Posted by brandont View Post
While nice if you can do it, you are actually costing yourself money in the long run if you can get a low enough rate on the loan and still pay cash. For instance if you can get a 2% loan and then invest the $30-40k cash that you would have spent at 5% or better then you are better off taking the loan. Of course you have to look at the fees in the loan and taxes paid on the interest, blah, blah, blah. But at some point you are actually better off taking the bank's money. Even in this economy you should be able to beat the interest paid.

I actually went through Chase and got around 2.4%. At the time they had a banner advertising 2.9% but when I actually applied I got the lower rate due in part to auto withdrawal and having my accounts there. My wife is a VP & officer at another bank and she couldn't even come close! I think they were at 4.25%! Yeah, it's a hot button topic around here - she was NOT happy with me!
Yep, I use to pay cash before a well educated finance advisor friend of mine enlightened me.
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Old 02-26-2012, 10:38 AM
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Re: Two banks fighting to get my loan.

Quote:
Originally Posted by brandont View Post
While nice if you can do it, you are actually costing yourself money in the long run if you can get a low enough rate on the loan and still pay cash. For instance if you can get a 2% loan and then invest the $30-40k cash that you would have spent at 5% or better then you are better off taking the loan. Of course you have to look at the fees in the loan and taxes paid on the interest, blah, blah, blah. But at some point you are actually better off taking the bank's money. Even in this economy you should be able to beat the interest paid.
True, however in this economy it is hard to find any investments that will pay a rate high enough that the after-tax return provides me a greater return than saving the interest expense of borrowing money I already have. In effect, the "Bank of Me" provides me a better rate.

If you do know of some investments that would change my mnd, I'd be interested in hearing about them.
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Old 02-26-2012, 10:49 AM
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True, however in this economy it is hard to find any investments that will pay a rate high enough that the after-tax return provides me a greater return than saving the interest expense of borrowing money I already have. In effect, the "Bank of Me" provides me a better rate.

If you do know of some investments that would change my mnd, I'd be interested in hearing about them.
Exactly! While it's cheap to borrow right now, I haven't been able to find a decent return from a relatively safe, liquid investment in forever. Luckily, the stock market has been slowly chugging upward lately.
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Old 02-26-2012, 02:27 PM
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Re: Two banks fighting to get my loan.

Quote:
Originally Posted by brandont View Post
While nice if you can do it, you are actually costing yourself money in the long run if you can get a low enough rate on the loan and still pay cash. For instance if you can get a 2% loan and then invest the $30-40k cash that you would have spent at 5% or better then you are better off taking the loan. Of course you have to look at the fees in the loan and taxes paid on the interest, blah, blah, blah. But at some point you are actually better off taking the bank's money. Even in this economy you should be able to beat the interest paid.

I actually went through Chase and got around 2.4%. At the time they had a banner advertising 2.9% but when I actually applied I got the lower rate due in part to auto withdrawal and having my accounts there. My wife is a VP & officer at another bank and she couldn't even come close! I think they were at 4.25%! Yeah, it's a hot button topic around here - she was NOT happy with me!
+1.....I scored 0% on mine last year. There is no way paying cash can beat that deal.
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Old 02-26-2012, 03:24 PM
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Re: Two banks fighting to get my loan.

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+1.....I scored 0% on mine last year. There is no way paying cash can beat that deal.
Zero percent is the best of all possible worlds to me. You get the cash price but also have the bulk of the sales prices still on hand for short term investments while dribbling out the monthly payments.
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Old 02-27-2012, 06:49 AM
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Re: Two banks fighting to get my loan.

This debate has been going on for years with points on both sides. I would rather own my vehicle than the bank owning it for 3 to 6 years and then you could have it taken away from you if you hit hard times and lose all the money you put into it. The same goes for your house or other large purchases. If investing is better than paying cash would you borrow money to invest it in the stock market? Would you take out a second loan on your vehicle or house to invest?
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